The sanity of destroying food crops during the Great Depression

[Perd Hapley]

I suppose most of us have read about farmers destroying crops, during the Depression, to keep prices from falling.  But, aside from a few lines in the Grapes of Wrath, I've never seen any discussion of how this seems perfectly insane, when so many people were suffering from poverty and hunger. 

Am I missing something? 

[zahc]

the government is evil. I think you forgot that part. They are doing equally evil things right now with the current recession.

[Ned Hamford]

Now we save the trouble by just going ahead and paying farmers not to grow.

[Monkeyleg]

It makes about the same sense as paying people to have their cars destroyed. Same mindset, different product.

[Jamisjockey]

http://wiki.answers.com/Q/During_the_Depression_why_were_farmers_destroying_their_crops_and_livestock

http://en.wikipedia.org/wiki/Agricultural_Adjustment_Act

The Agricultural Adjustment Act (AAA) (Pub.L. 73-10, enacted May 12, 1933) restricted agricultural production in the New Deal era by paying farmers to reduce crop area. Its purpose was to reduce crop surplus so as to effectively raise the value of crops, thereby giving farmers relative stability again.[when?] The farmers were paid subsidies by the federal government for letting a portion of their fields lie fallow. The money for these subsidies was generated through an exclusive tax on companies which processed farm products. The Act created a new agency, the Agricultural Adjustment Administration, to oversee the distribution of the subsidies. It is considered the first modern U.S. farm bill.[citation needed]

In 1936, the Supreme Court case United States v. Butler declared the Act unconstitutional for levying this tax on the processors only to have it paid back to the farmers. Regulation of agriculture was deemed a state power. However, the Agricultural Adjustment Act of 1938 remedied these issues.

[Perd Hapley]

Jamis, I understand that, as I said in the OP.  But destroying food in the middle of an economic crisis is still backward and idiotic. 

Unless there's some big issue I'm missing. 

[Nitrogen]

Here's the thought process of the time.

First off, realize that farmers don't grow food for the love of it, they do it to support their families.
If farmers don't make enough selling their crops/livestock, their farms dissapear.  You get this happening to enough farms; it hits critical mass, and you have a famine.

This was put into place to hopefully avoid having the problem hit critical mass.

The tax on ag processors was a way to pay for things in such a way that it could be continued.  Just paying out for crops probably wouldn't be sustainable at all, even though that makes better sense for the time.

In recent memory, it's always been the policy of the government that food be cheap enough that almost anyone can afford it.  It's almost always been the policy that food is too important to trust free market forces to set prices for.

In reality I think this "cheap food policy" has helped keep many from starving, but has also pushed many into unhealthy food choices, so it's giving with one hand, and smacking with the other.

I'm not an über-economist, other that what I studied in HS and the bit of college I took.  In honesty, I can defend the polcy as well as attack it, and can make either side make sense in my head.

[Zardozimo Oprah Bannedalas]

Back in The Day(TM), farmers often fell victims to the latest craze/cash crop. One year, they hear how awesome tobacco did. So a pack of them grow tobacco the next year. Supply goes up considerably, demand remains constant, cash crop isn't worth that much - and more basic food ingredients go up in price. So the year after, farmers went with, say wheat - which jumped up in price the year before. Lo and behold, wheat prices drop, tobacco prices go up. The village genius decides that it's time to grow tobacco... The .gov got involved to deal with these price fluctuations and shortages, and ensure that there was a steady supply of food available every year. The farmers had a massive surplus of corn, so it was destroyed. After all, to get better prices, you have to either increase demand or reduce supply. So they reduced the supply.

[Scout26]

http://www.amityshlaes.com/

The Forgotten Man Explains that FDR didn't have a master plan, they just kept "experimenting" trying to fix things but only made them worse and prolonged the Depression.  If the .gov had just left it alone, the country would have bounced back quicker and healthier.

[Headless Thompson Gunner]

Jamis, I understand that, as I said in the OP.  But destroying food in the middle of an economic crisis is still backward and idiotic. 

Unless there's some big issue I'm missing. 

The big issue is incentives.  Specifically, the issue is that all kinds of bassackwards situations can arise when economically ignorant government twits seek to re-align incentives in ways government, in its ultimate wisdom, thinks are best.

In more normal times, the interests of the farmers were to produce as much food as possible and sell it to the hungry masses for money.  After the government twits stepped in and altered the incentives, the farmers' best interests were served by not producing and selling crops, as this was the way to receive more government money.